50-Year Sale Taken Down Smoothly

The PBOC matched maturities with injections, repo rates within recent ranges. Equity markets rose after reports that US President Biden and Chinese President Xi had agreed to a more open dialogue going forward. Future came off earlier highs and dropped to around neutral levels. 10-Year up 1 tick at 99.895 compared to highs of 100.005, 2-Year up 0.5 ticks at 100.72 having moved in a narrow range through the session. The MOF sold 50-Year debt, the sale was well covered despite a ~25bps yield drop from the previous auction. Elsewhere Evergrande's dollar bonds roe as regulators acquiesced to a plan to renegotiate payment deadlines with banks and other creditors.